Certain taxpayers who can’t pay their full tax liability may seek an Offer in Compromise (OIC) with the IRS. An OIC is an agreement that settles the debt for less than owed if the taxpayers can demonstrate verifiable financial hardship. In one case, a couple was granted an OIC to resolve their disputed tax liabilities. But the IRS later repudiated the OIC. The tax agency asserted that in procuring the agreement, the couple lied about their assets, specifically the value of their home and their ownership interest in it. The couple filed a lawsuit to fight the action. But a U.S. District Court dismissed their complaint, calling their claim structurally defective. (Novoselsky, DC Wis., 8/8/24)
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